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Johnson's Russia List


April 2, 1999    
This Date's Issues: 3122 3123 


Johnson's Russia List
2 April 1999

[Note from David Johnson:
1. Reuters: Russia marks April Fool's with vodka,Lenin,Monica.
2. Moscow Times: Jonas Bernstein, PARTY LINES: A Transition For Russia, 
But to What? 

3. Reuters: Russia military options limited on Kosovo.
4. Rossiyskaya Gazeta: Vladimir Kuznechevskiy, How Clinton and Milosevic 
Can Save Face. And Russia -- Its Dignity. (Primakov May Have Suggested Kosovo 
Partition to Milosevic).

5. Fred Weir on Russian reactions to war in Yugoslavia.
6. Abe Brumberg: Politicians and Academic Gurus. 
7. Georgi Sturua: JRL 3116/Laura Belin: NATO influence on domestic politics.
8. Los Angeles Times editorial: Rethink This One, Russia.
9. Itar-Tass: Primakov Called Winner of First Week of War by US Newspaper.
10. Moscow Times editorial: Cooperation With IMF Is Positive Sign.
11. Itar-Tass: Berezovsky Fears He Might End CIS Summit in Handcuffs.
12. AP: 2,000 Writers Died in Soviet Purges.
13. AP: Yeltsin's Impeachment Being Debated.
14. New York Times: John Cushman Jr., Russian Woes May Aid U.S. Emissions 

15. AmCham Newsletter: Crisis as Opportunity. Talk by Irina Khakamada.
16. Rossiyskaya Gazeta: Primakov: 'We Will Put a Stop' to Illegal Capital


Russia marks April Fool's with vodka,Lenin,Monica
By Andrei Khalip

MOSCOW, April 1 (Reuters) - Non-alcoholic vodka, advice from Monica Lewinsky 
on Kosovo and a new Quentin Tarantino film set in the Lenin mausoleum were 
among the surprises dished up by Russia's newspapers on Thursday to mark 
April Fool's Day. 

The influential business daily Kommersant said Hollywood cult director 
Tarantino was preparing to shoot a horror movie called ``The Kremlin 
Gremlin'' in the mausoleum on Red Square, where the Bolshevik leader who died 
in 1924 still lies in state. 

The film would feature a live actor instead of Lenin's mummified body, which 
would be removed for the filming, it said. 

``The actor will have to rise from his coffin and start running around the 
mausoleum after an American who is fighting the risen Kremlin dark force,'' 
said the paper. 

The popular Moskovsky Komsomolets daily said Lenin's mummy would get a new 
suit for his birthday on April 22 and the world's top fashion designers had 
been invited to take part in a tender to make the outfit. 

``Hugo Boss and Cerutti offered an austere business-style suit...while 
Vivienne Westwood and Sonia Rykiel promised to dress up the old man as a real 
revolutionary nihilist,'' it said. 

Other papers joked about the nation's favourite tipple with detailed reports 
about the production of non-alcoholic vodka and soluble tablets that make 
sizzling Stolichnaya. 

Kommersant reported that Monica Lewinsky, the former White House intern who 
had an affair with Bill Clinton, would meet Russian politicians to discuss 
how to influence the U.S. president over policy in Kosovo. 

Russia fiercely opposes NATO's bombing of Yugoslavia and has unleashed a 
barrage of anti-American rhetoric in recent days. 

Russian politicians were not exempt from the jokes. 

Moscow's ambitious mayor and likely presidential candidate Yuri Luzhkov, 
whose trademark black leather cap has earned him the nickname ``The Cap,'' 
appeared in a Moskovsky Komsomolets photograph sporting an old-fashioned 

``Too many people started mimicking me...In the end the cap was becoming 
associated with too many other politicians,'' it quoted Luzhkov as saying. 

Kommersant, which publishes currency exchange rates daily, printed 1979 
Leonid Brezhnev-era rates, when the rouble stood as high as 0.66 per dollar. 

In recent years the rouble has plunged against Western currencies. Last year, 
the government lopped off three zeroes to underline its belated success in 
taming inflation but the rouble has tumbled again since last August's 
financial crash and now trades at around 24 per dollar. 


Moscow Times
April 2, 1999 
PARTY LINES: A Transition For Russia, But to What? 
By Jonas Bernstein
Staff Writer

While the Kosovo crisis has forced insular America to focus more attention 
this way, Russian issues, when addressed at all in the States, tend to be 
used as little more than props in domestic debates. 

An example of this was a recent New York Times exchange between two veteran 
Sovietologists, Stephen F. Cohen and Martin Malia, over Russia's reforms. 
Malia, a neo-conservative, believes Russia's current plight is a result of 
its Communist legacy, while Cohen, who is on Sovietology's left, believes 
President Boris Yeltsin has led not a "transition," but a "regression." 

Their exchange, in my view, simply shows how little help the old Cold War-era 
paradigms are in elucidating what went wrong here. 

Malia's analysis has a cartoon-like quality. He writes, for example, that 
Yeltsin and his allies chose "the market and democracy" because they were the 
only alternatives to "plan and party." History would indeed be a breeze if it 
could be boiled down to such simple alternatives, rather than being filled 
with "cunning passages" and "contrived corridors," as T.S. Eliot put it. 
Reality outside academia comes in shades of gray. 

And when, exactly, did post-Stalinist Russia decisively break with 
authoritarian politics and economic monopolism? With Gorbachev's rise - or 
his fall? The Soviet Communist Party's abandonment of its leading role? The 
withdrawal from Afghanistan? Yeltsin's rise to power? The shelling of the 
White House? The rigged constitutional referendum? The Chechen War? With 

Or maybe the real problem is in the Western insistence that history is a 
"process," comprised of "transitions." Perhaps the elements of continuity 
between the Soviet and post-Soviet periods are as salient as the differences 
- or even more so. 

For Malia, last August's crisis was caused not by the mistakes of Yeltsin's 
"reformers," but by Communism's legacy of obsolete heavy industry, which 
continues to drag the economy down. Why, then, does Communist China have 
growth rates and foreign investment that put Russia to shame? Why does 
Poland, which actually privatized more slowly than Russia, have twice as many 
small businesses? 

Perhaps because both China and Poland, each in their very different way, 
provided a semblance of order, thereby allowing the creation of totally new 
businesses. Why hasn't Russia, with its renowned computer-science talent, 
created a Silicon Valley? Perhaps because bandits and bribe-takers have made 
it more rational to work in California and Israel. 

Cohen's sins, meanwhile, are the mirror image of Malia's. He attacks Yeltsin 
for ruling "largely by decree through a corrupt bureaucracy," while he 
praises Gorbachev. Yet Gorbachev's "gradualism" and "mixed economy" were as 
fraught with thievery as Yeltsin's "shock therapy" and "market." The case of 
FIMACO is a symbol of this continuity. The offshore firm was reportedly set 
up in 1990 to funnel Communist Party money abroad and then, post-1991, 
adapted to"manage" Russia's hard-currency reserves. 

In analyzing Russia, it is time to abandon "the smelly orthodoxies" of 
yesteryear, as George Orwell put it. Russia has suffered not from "socialism" 
or "capitalism," but from the absence of a political elite imbued with the 
quality Orwell valued above all - common decency. 


ANALYSIS-Russia military options limited on Kosovo
By Martin Nesirky

MOSCOW (Reuters) - When news broke Moscow was sending a single reconnaissance 
ship to the Mediterranean to monitor the Kosovo crisis, a Russian navy 
spokesman questioned whether there would be enough fuel for the mission. 

That comment, perhaps more than all the Cold War-style bluster of recent 
days, symbolizes the true potential of the stretched and cash-sapped Russian 
military to influence events in the Balkans. 

Russia -- still a nuclear power with 1.2 million men under arms and four 
naval fleets -- has been harshly and almost uniformly critical of NATO's air 
strikes on Yugoslavia for failing to sign a peace deal for Serbia's Kosovo 

Yet so far, aside from some retaliatory diplomatic steps and ostensibly 
pre-planned military exercises, the rhetoric has not been matched by action, 
not least because economic crisis means there is scant funding for the 

Indeed, President Boris Yeltsin, who has described his decision to wage war 
between 1994 and 1996 against Russia's rebel Chechnya region as his biggest 
mistake, said Tuesday Russia would not be ``sucked into a military 

He said most Russians were more concerned about the economy. 

``On the government side all down through the system I have yet to see anyone 
who is seriously arguing they should get involved militarily,'' a senior U.S. 
government official said. 

It is true the Defense Ministry has made much of the running when it comes to 
steps against NATO, while Foreign Minister Igor Ivanov, untypically, has 
assumed the role of verbal hawk. 

Among defense reprisals, NATO representatives have been expelled from Moscow 
and Russia has postponed a review of a major bilateral defense aid project 
with the United States. It has also scrapped plans to cooperate with 
Washington on the millennium bug computer problem in their nuclear forces. 

Then Wednesday, Defense Minister Igor Sergeyev announced a reconnaissance 
ship would head for the Mediterranean and might be followed through the 
Bosphorus straits by half a dozen more ships from the Black Sea fleet, if 
Yeltsin ordered it. 

``A reconnaissance ship called Liman is sailing out tomorrow from Sevastopol 
under a presidential order to reconnoiter the Mediterranean Sea and beyond 
its sea boundaries to study developments in the area to guarantee Russia's 
security,'' said navy spokesman Captain Igor Dygalo. 

``It has on board all the latest means of reconnaissance including 
electronics,'' he said. He said it was armed but declined to say with what. 

The United States and Turkey, which straddles the straits, reacted 
allergically to Sergeyev's announcement. There is a fear Russian intelligence 
will be handed to the Yugoslavs, although Russia has apparently assured 
Washington that will not happen. 

Some political analysts argue the decision to deploy the ship was the first 
substantial error in the way Russia has handled the crisis. 

Alexander Koretsky of the newspaper Sevodnya said the move meant ``the last 
doubt'' had disappeared as to why Defense Minister Igor Sergeyev and the 
foreign and military intelligence chiefs accompanied Prime Minister Yevgeny 
Primakov on his unsuccessful peace mission to Belgrade this week. 

``Even a novice in diplomacy understands that a slightly different line-up is 
needed for talks about peace and armistice,'' he wrote. 

Other political analysts saw the move as consistent with Moscow's approach so 
far. One said deploying more than the one ship would indicate strong resolve 
to escalate beyond rhetoric. 

Thursday, Russia hinted that might be the case when it said it had lined up 
unspecified ``new tasks'' for the armed forces because of NATO's continued 
air strikes. 

But defense analysts were skeptical. 

``They had to say something,'' said one Russian military expert. ``But they 
know it's an empty threat.'' 

>From the military's point of view, the fuel tanks are emptier than the 

One Western military analyst said the fleet might even have to draw on its 
war reserves of fuel if the seven ships all headed for the Mediterranean on 
such a mission. 

``It would be a better move to spend the money on paying their sailors,'' 
said Sergei Markov, head of the Institute of Political Studies, alluding to 
vast wage arrears that are undermining morale throughout the armed forces. 


Primakov May Have Suggested Kosovo Partition to Milosevic 

Rossiyskaya Gazeta
31 March 1999
[translation for personal use only]
Vladimir Kuznechevskiy article under the "Scenario" rubric: "How 
Clinton and Milosevic Can Save Face. And Russia -- Its Dignity" 

The Russian prime minister's blitz visit to 
Belgrade in the company of the ministers of defense and foreign affairs 
and chiefs of the Foreign Intelligence Service and the General Staff Main 
Intelligence Directorate radically alters the military situation in the 
Balkans and Europe. 

Few people are aware of the fact that Primakov's lightning visit to 
Belgrade and then to Bonn was preceded by Primakov's personal 
conversation with the president of France and then by a briefing of 
[President] Boris Yeltsin. Right after that, French diplomatic sources 
conceded that, if "there is one little key to the little door that leads 
to peace in the Balkans, it is Russia that holds it." 

In parallel with Moscow's negotiations with the French capital, Russian 
Federation Foreign Minister Igor Ivanov conducted talks with the European 
Union, to which he proposed abandoning the services of the International 
Contact Group for Former Yugoslavia because NATO's aggression against 
Yugoslavia has practically disavowed that body's very existence, and 
creating a dynamic diplomatic group that would include representatives 
[plural as published] of Russia in the person of Igor Ivanov and 
representatives of France, Germany, and Great Britain who would tackle 
the Balkan crisis. The European Union has given its consent. 

So, what has Russian Premier Primakov brought to Western Europe? As far 
back as a year ago, in March of 1998, Rossiyskaya Gazeta suggested that 
the Balkan war would end with Kosovo's secession from Serbia. In October 
of last year, we suggested that Serbia would never cede the province's 
rich natural resources to Albanians. To all appearances, this concept may 
now become transformed into partition of the province rather than its 
total secession. 

According to information available to Rossiyskaya Gazeta, the Russian prime 
minister may have suggested to Yugoslavia's President Slobodan Milosevic 
that he agree to the partititon of Kosovo. The entire northern part of 
the province, together with its capital Pristina, which has been 
devastated by the NATO bombings and on whose territory Serbian historical 
monuments, including the famous Kosovo Field, where the historic Kosovo 
battle between Serbs and Turks was fought in 1389 and where the main 
rare-metal deposits (chromium, nickel, and so on) are situated, would go 
to Serbia (Yugoslavia). 

The southern part of the province, bordering on Albania and Macedonia 
(the 10,000-strong US Expeditionary Corps is currently stationed on the 
territory of the latter) would be proclaimed not just autonomous but 

NATO would have the right to bring its troops there. But it will no 
longer be Yugoslavia's territory. 

In this manner, a balance of interests would be created. S. Milosevic 
would agree, de facto, to Washington's main demand -- the bringing of 
NATO troops into the territory of Yugoslavia. But legally, everything 
would look totally differently: Belgrade does yields to NATO's pressure 
but gets rid of territories that it no longer considers its own. NATO 
stops the bombings and thereby meets Belgrade's ultimatum: No 
negotiations with the alliance as long as NATO aircraft are bombing 
Yugoslavia's territory. 

Everybody saves face. Supposedly. Formally. The war in the Balkans ends. The 
Kosovo Serbs stay on their own land and nobody oppresses the Albanians. 
NATO returns to its barracks. It does not lose face but loses its 
authority in Europe. Russia remains the only power in Europe capable of 
settling the seemingly unsolvable situation. Finita la comedia. For 
Washington and for NATO. 


Date: Thu, 1 Apr 1999 
From: "Fred Weir" <> 
For the Hindustan Times
From: Fred Weir in Moscow

MOSCOW (HT April 2) -- Irina Baburova says the NATO bombing campaign
against Yugoslavia has dispelled her illusions and forced her to view the
world through hard, cold eyes.
"I used to think America could teach us something, but now I
see it's just drunk with power and out to bully everyone," says the
dark-haired, 54-year old school teacher.
"The Americans think everyone has to accept their ideas, their
money, their politics. Do what they say, or they'll bomb you".
Ms. Baburova's evolution is typical of the way many Russians
have moved over the past decade from idealizing the West to detesting it.
In the 1980's, even though the NATO countries were the USSR's official
enemies, most Russians greeted Western visitors warmly, plied them with
curious questions and, in private, often expressed envy of Western freedoms
and lifestyles.
But after several years of exposure to capitalism's hard edges
and with a growing sense of betrayal and abandonment, Russians are now
displaying levels of genuine anti-Americanism that would make their former
Soviet leaders glow with pride.
"Our attitude to the West over the past decade has been a long
fall, from euphoria to disenchantment," says Georgi Shakhnazarov, a
Soviet-era Kremlin adviser who now works for the Gorbachev Fund, a think
tank run by the former president of the USSR.
"Everybody thought the West would help us, teach us, bring us into its
superior way of life," he says. "Now increasing numbers of Russians believe
the U.S. and other countries conspired to destroy the Soviet Union, to wreck
our economy and reduce us to Third World status.
"Now we see NATO, which was supposedly only a defensive
alliance, attacking and bombing Yugoslavia, a traditional friend of
ours. People think: maybe we could be next".
The NATO assault on Yugoslavia has provided a focus for the
rage many Russians feel at the accumulated disappointments of the
post-Soviet period, including a failed economy, disintegrating society and
Russia's humiliating loss of international prestige.
In one sign of that things could turn ugly, a crowd of
teenagers trashed a foreign-owned Moscow cafe called "Uncle Sam's" a week
ago, smashing windows and furniture and chanting "war on America".
During an anti-NATO demonstration in front of the U.S. embassy last
weekend, three armed men raked the front of the downtown Moscow building
with automatic weapons fire and tried to launch rocket grenades before being
driven off by police.
A previously unknown group called "Skif" claimed
responsibility for the embassy attack and, in a message delivered to Russian
media, warned all U.S. citizens to leave Russia by April 3.
"The remaining Americans will be the objects of acts of
retribution for the U.S. aggression against Yugoslavia," the message said.
About 50,000 Westerners live in Moscow. No individual attacks on foreign
citizens have been reported, though many say they are frightened enough to
stay home or refrain from speaking English in public.
But most Russians questioned on Moscow streets insist they
bear no ill will toward the people of Western countries.
"I have met many American colleagues at conferences, and I
know they're wonderful people," says Natalya Girova, a 42-year old professor
of psychology. "They're still wonderful people in my book, but I hate what
their governments are doing in Yugoslavia".
Virtually all Russian politicians, from President Boris
Yeltsin to the Mayor of Moscow, have denounced NATO's actions in strong
They argue the Western alliance acted illegally by
sidestepping the United Nations, that force will not solve the complex knot
of problems in the Balkans and that Russia's opinions were rudely shouldered
aside in the rush to war.
"Our government is trying to stress rational responses. It is
important to keep a balance between the rising tide of public opinion and
Russia's long-term imperative to stay on good terms with the West," says Mr.
"But it's a difficult and dangerous dance".
Russia's powerful Communist and nationalist opposition are
calling for sterner steps, such as supplying modern anti-aircraft
weapons to Yugoslavia, sending a volunteer force to fight alongside the
Serbs and deploying Russian nuclear missiles in the former Soviet republics
of Belarus and Ukraine.
"The majority of Russians oppose getting involved in the
conflict, but the trends are alarming," says Yury Levada, director of the
Russian Centre for Public Opinion Research, the country's top polling
"We all have to hope this war ends soon". 


Date: Thu, 1 Apr 1999 
From: abraham brumberg <> 
Subject: Politicians and Academic Gurus

By Abe Brumberg

During the Vietnam War, a friend of mine, who worked for RAND Corporation,
wrote a learned paper in which he tried to show that the South Vietnamese
were fully in support of US blanket bombing. the use of napalm, and other
such miracles of American military technology and strategy. Several
other scholars, I recall, weighed in with full approval of this notion.. 
(This could go under the rubric of "How I learned to love the bomb"). 

Some time later the great contemporary disciple of Graf Clemens von
Metternich, Heinrich Kissinger, embarked upon a series of "secret"
bombings of Cambodia, in order to eliminate the bases of Viet Cong, which
sought shelter in that country. As a result of this brilliant move, as we
know, the Pol Pot forces grew from strength to strength, soon seizing power
and then massacring over a million Cambodian peasants who had been kept in
the dark (along with presumably the Soviet Union and Luxembourg) about the
provenance of the B -2s raining fire upon their rice paddies.
o the best of my knowledge, Dr. Kissinger never allowed that he might
have been wrong...

And now we have our American President, fresh from his delicious dalliance
with Fraulein Lewinsky. sending heavy aircraft. over Yugoslavia in order
to deter Milosevitch from denuding Kosovo of all Albanians. Faced with the
continued "ethnic cleansing", a distinguished former State Department
officials and close associate of Dr. Hedirich Kissinger observed on one of
those Sunday morning TV punditries that, well, yes, the outrages did
indeed intensify, but the Pentagon and White House had incontrovertible
evidence that Milosevitch was preparing to do just that whatever the NATO
(that is, Washington) reaction might be. 

Now, of course, we know this ain't quite true: in fact the intelligence
services had warned Clinton et al that Milosevitch would ACCELERATE his
Kosovo carnage in response to Western air strikes. To which apparently the
US response is to launch mass bombings of Belgrade and other cities in
Yugoslavia. That'll learn'em!

At approximately the same time, another American guru published an
article saying that the US (NATO, or what have you) should stop the bombing
and send Russian troops into Kosovo to keep the peace and repair the houses
destroyed by the Yugoslav military and para military. Milosevitch, he
thought, is likely to accept this idea. The trouble, however, was that his
proposal was proffered just on the day Primakov came back from his mission
to Belgrade with his tail between his legs, and a day after three of those
wonderful shock therapy Russian economists, including former prime
minister Gaidar, returned from Belgrade similarly empty handed after
speaking to Milosevitch, and provoking few sardonic comments from the
Russian Ministry of Foreign Affairs.

All of which impels Senator Richard Lugar, obviously piqued by all these
dismal developments, to call upon President Clinton to send
troops--AMERICAN TROOPS , the finest in the world, as we know, to clean
up the mess in Kosovo. I have it from reliable sources that THE WASHINGTON
POST refused to include Senator Lugar's estimate of how many body bags
should be sent along with our GI's.)

I now await another scholar from Rand Corporation or perhaps from another
"think tank" to assure us that the Kosovans want to be bombed to kingdom
come as long as Milosevitch get his come-uppance.

Why not? 


Date: Thu, 1 Apr 1999 
From: "Georgi Sturua" <> 
Subject: JRL 3116/Laura Belin: NATO influence on domestic politics

I fully agree with Laura Belin when she doubts that the Russian 
electorate will be to much preoccupied with foreign policy issues while 
going to the polls. However, just like the war in Vietnam proved to be 
one of the most significant domestic factors determining outcomes of the 
American political battles in the 1960s and 1970s, NATO's military 
operations against Yugoslavia reveal, first and foremost, their 
importance in the "Where-Does-Russia-Go-From-Here" pre-election debates. 
Not foreign policy issues as such ("what will happen to Vietnam/ 
Yugoslavia?") ignited the American voters then and the Russian public 
now. In the former case, the Americans were appalled by the heavy 
casualties suffered by the US armed forces. In the latter case, the US 
and NATO actions in defiance of Moscow are an additional indication for 
some of my fellow countrymen that the Western way of life based on free 
market and democracy is totally unacceptable for Russia .

Whether anti-American and anti-Western sentiments in Russia are on the 
rise or not is an open question. One may agree with the point made in 
JRL that it is more accurate to speak of strong anti-US Government 
feelings which prevail in Russia. But to imply that the Government is a 
completely alien force for the Americans is to stretch the argument too 
far. Needless to say that American expats here have not been losing 
their Russian friends in great numbers lately. To simply stop at this 
admission, however, may be an equivalent to stating "they are no 
anti-Semites, their best friend is Rabinovitch". 

Any "anti-" syndrome is a complex psychological and social phenomena 
difficult to measure. What is not debatable in the context of the war 
waged by NATO in Yugoslavia is that hostilities provided a "legal" and 
justifiable excuse for declaring anti-US/Western sentiments openly and 
in an aggressive manner in many sectors of the Russian society. Not the 
sight of the die-hard Communists or crazy Jirinovtsy parading in front 
of the US Embassy in Moscow was alarming. The sounds of the middle-class 
cars' horns in support of the demonstrations were a more disturbing 

Not only the Communists will be the beneficiaries of the moods that 
surfaced so vividly as a result of the war in Yugoslavia. Both the very 
pragmatic Moscow Mayor and the maverick General may be expected to 
attract new followers hurt and humiliated when Russia lost the 
superpower status and its trappings. Being quite careful not be 
identified with blatant anti-Americanism, these presidential hopefuls, 
nevertheless, stand to lose to the Communists who thrive and succeed in 
the atmosphere of political hysteria and outright rejection of Western 


Los Angeles Times
1 April 1999
[for personal use only]
Rethink This One, Russia 

Except in the aftermath of the world wars, Washington has had only limited
influence on the fate of territorial bits and pieces of Europe. The
European powers have sorted out these disputes, with the former Soviet
Union often a key player. Now Moscow again has a role in a crisis, this
time in Yugoslavia, and how it plays the hand will be closely watched. So
far the Russians are standing firmly with Yugoslavian President Slobodan
Milosevic, but that position has risks. 

Russian Prime Minister Yevgeny M. Primakov did not go to Belgrade this week
to give Milosevic a pat on the back. While Slavic and former communist
bonds exist between the two countries, Primakov knows that Milosevic can
hurt Moscow's interests, which include increasingly important support from
Western institutions at a time of economic straits. 

Other connections to the West run through military arrangements in Europe.
For instance, revisions in the Conventional Forces in Europe Treaty, which
specified NATO and Soviet limits on tanks, artillery and aircraft during
the Cold War, are expected to be approved this year. A new accord could be
ready for acceptance at a November summit of the Organization for Security
and Cooperation in Europe, of which Russia is a member. 

Another key to Russian cooperation in seeking a solution to the Kosovo
crisis is the prospect of an International Monetary Fund rescue package for
the stumbling Russian economy. While unrelated, it is bound to cast a
shadow on diplomatic efforts to resolve the Yugoslav disaster. In its own
interest, Moscow should weigh the long-term importance of Western economic
support against its military ties with Belgrade. Russia underlined those
ties Wednesday by announcing, disturbingly, that it was sending a
reconnaissance ship into the Mediterranean and placing other ships on

Nevertheless, there is a clear downside for Russia in standing by
Milosevic. Efforts to repolish Moscow's international image in the
post-Cold War world have been dulled by Milosevic's brutal campaign to rid
Kosovo of its ethnic Albanian population through forced emigration and
genocide. If Primakov made any effort in Belgrade to curb the Yugoslav
military, he clearly failed, and subsequent news from Moscow indicates no
decline in support for Milosevic. 

Russia should review its backing of a bloody regime. Slavic bonds and a
shared communist history cannot possibly justify these atrocities. Moscow
should look to its future. 


Primakov Called Winner of First Week of War by US Newspaper.

NEW YORK, April 2 (Itar-Tass) -- The winner of the first week of military 
actions in Yugoslavia was Russian Prime Minister Yevgeny Primakov, according 
to an influential American business newspaper The Journal of Commerce and 

The newspaper says that, according to analysts, Prime Minister Yevgeny 
Primakov skillfully maintained equilibrium between diplomacy, home policy and 
economic problems in his attempts at securing peace between Yugoslavia and 

Even though the North Atlantic Alliance rejected his proposal for a truce 
with Yugoslav President Slobodan Milosevic, experts think that Yevgeny 
Primakov's initiatives for talks should not be turned down in a hurry. 

The US newspaper notes the irony of the fact that many newspapers front-paged 
not pictures of President Bill Clinton but pictures of Primakov - first 
smiling during a meeting in Moscow with IMF Managing Director Michel 
Camdessus and then apparently pleased with his meeting with Milosevic in 

Primakov's first attempt was almost certainly made to satisfy demand inside 
Russia for a more prominent role to be played in the crisis, the newspaper 
suggests. In this respect, he succeeded fully. Having reached a preliminary 
accords with Camdessus, Primakov then met Milosevic and thus accomplished the 
most pressing two tasks set for him by the Russian public without going to 
Washington, the newspaper says. 


Moscow Times
April 2, 1999 
EDITORIAL: Cooperation With IMF Is Positive Sign 

This week's embryonic deal between Russia and the International Monetary Fund 
is certainly not the dawn of a new financial boom, but it is a small positive 

The hype surrounding the deal, and the backdrop of the Yugoslav crisis, only 
encouraged cynicism. Prime Minister Yevgeny Primakov proudly announced the 
deal on Russian prime-time television only to have the IMF backtrack later to 
its U.S. audience. There are, it turns out, still plenty of i's to be dotted. 

But the deal marks the resumption of some sort of structured cooperation 
between Russia and the international financial community and a recognition 
that Russia cannot ignore Western ideas of economic reform. 

Of course, Primakov has been dragged kicking and screaming to this point. Six 
months ago, when he took office, he tried to blame the advice of the IMF and 
the West for Russia's problems and pledged a new economic policy. The old 
spymaster called in a bunch of communist-era chronies who drafted a series of 
Soviet-style economic plans. 

But Primakov has now accepted that he cannot ignore the IMF and its precepts 
about balancing the budget and controlling inflation. This may not so much 
reflect a change of ideology as a recognition that without some sort of 
understanding with the IMF, Russia faces a new debt catastrophe in the next 
couple of months. 

With big loans to the IMF and to Eurobond holders coming due and with the 
London Club and Paris Club Soviet-era debts already in arrears, Russia could 
have been pushed into formal default. More importantly from a domestic 
political point of view, without loans Russia would soon have exhausted its 
foreign hard currency reserves and the ruble would have collapsed. 

So, Primakov has accepted that he needs the IMF. The new loans will not start 
a boom. In fact, at best, Russia can only hope to get enough new loans to pay 
for maturing debt. But the absence of bad news in this case is good news. 

Russia is now back to the traditional battle of the last six years where the 
IMF has pushed for reforms and successive governments took one step forward, 
one step sideways and one step back. 

The IMF will now want to see progress in tax collection and the banking 
sector. It might also check to see that its money is not stolen this time. 
Primakov can push measures through parliament that past governments couldn't. 
Since Russia desperately needs the money, the IMF has plenty of leverage. 


Berezovsky Fears He Might End CIS Summit in Handcuffs.

MOSCOW, April 1 (Itar-Tass) - Russian oil-to-media tycoon Boris Berezovsky 
fears that at the end of Friday's summit of the Commonwealth of Independent 
States which is likely to dismiss him from the position of CIS executive 
secretary, he might be arrested by law enforcement agencies, NTV commercial 
television cited him as saying on Thursday. 

Berezovsky said in a statement to NTV that "he might be handcuffed at the end 
of the meeting" and stressed that if so, it will be done "strictly for 
political reasons." He also said that he had already been summoned to 

NTV said that a source in the Prosecutor's Office confirmed Berezovsky had 
been summoned in a written form to appear, but added that his arrest was out 
of the question. 

Two weeks ago, State Duma speaker Gennady Seleznyov claimed that 
"Berezovsky's days are numbered and very soon his arrest warrant will be 

NTV cited Berezovsky as saying he will attend the CIS summit on Friday "by 
all means". It also said that according to data available, eight out of 12 
heads of the CIS member-states have already sent in their written consent to 
dismiss Berezovsky while another two agreed orally. 

Berezovsky's started loosing his influence after the beginning of a hidden 
war with Prime Minister Yevgeny Primakov. Earlier this year, prosecutors 
raided and searched offices of some companies run or controlled by the 


2,000 Writers Died in Soviet Purges
April 1, 1999

MOSCOW (AP) -- More than 2,000 writers and poets perished in communist 
purges between the 1917 Bolshevik revolution and the death of Soviet dictator 
Josef Stalin in 1953, an official said Thursday.

Most of the intellectuals either starved to death at prison camps or were 
executed, said Alexander Yakovlev, who heads a presidential commission on 
rehabilitation of political repression victims.

Russian officials have said in the past that they believe that more than 20 
million people were the victims of communist purges before Stalin's death, 
and more than 10 million of them died.

Political repression continued after Stalin's death, but at a lesser rate. 
Under Leonid Brezhnev, who was the Soviet leader from 1964 to 1982, more than 
150 writers, musicians, composers and artists were exiled to foreign 
countries, Yakovlev said.


Yeltsin's Impeachment Being Debated
April 1, 1999

MOSCOW (AP) -- Boris Yeltsin's envoy to the lower house of parliament said 
today the president was ``not afraid'' of the upcoming impeachment debate 
against him.

The impeachment drive is expected to fizzle, just like past attempts, but 
even debating it would hurt Yeltsin, whose authority has been crippled by 
frequent illnesses and Russia's economic crisis.

Alexander Kotenkov, Yeltsin's envoy to the lower house, the State Duma, said 
the president ``has committed no crimes, he does not feel guilt and therefore 
is not afraid of the impeachment vote,'' the ITAR-Tass news agency reported.

Prime Minister Yevgeny Primakov urged the Duma to postpone the debate, set 
for April 15, but hard-liners behind the move have refused to budge.

The motion must win a two-thirds majority in both houses of parliament and 
approval by Russia's highest courts. The upper house, the Federation Council, 
has supported Yeltsin in the past, but its loyalties have become less clear 
in recent months, when it has defied Yeltsin on several issues.

A parliamentary committee has charged Yeltsin with launching the botched 
1994-96 war in Chechnya, instigating the 1991 Soviet collapse, improperly 
using force against hard-line lawmakers in 1993, bringing the nation's 
military to ruin and waging genocide against the Russian people by pursuing 
economic policies that impoverished the country.


New York Times
1 April 1999
[for personal use only]
Russian Woes May Aid U.S. Emissions Goals

WASHINGTON -- The United States and other industrial countries may find it
easier and cheaper than expected to comply with a proposed treaty to fight
global warming, thanks largely to reduced fuel consumption in Russia, the
Government's energy-forecasting agency said Wednesday. 

Because the agreement on global warming allows international trading of
pollution credits as a way to control emissions of heat-trapping greenhouse
gases like those that come from burning fossil fuels, more of the cuts that
the treaty seeks may come from the former Soviet Union and less from the
United States, the Energy Information Administration said in its annual long-
range forecast. 

That would mean that the United States, the world's leading source of
greenhouse gases, could meet the treaty's targets without completely reversing
its recent increases in emissions, which have grown with energy use as the
domestic economy blossomed. But substantial reductions in emissions would
still be needed. 

The agreement, negotiated in Kyoto, Japan, in 1997 and signed last year by
the Clinton Administration, has not been ratified by the Senate, where it
faces significant opposition from lawmakers who say it would be too costly and
would cause disruptive cuts in energy use. 

The Kyoto Protocol calls for the United States to cut its emissions of
greenhouse gases within 10 to 15 years to a level 7 percent below its
emissions in 1990. Emissions in 1997 were 10 percent above the 1990 level and
the energy agency has forecast that by 2010 they will be 33 percent above the
1990 level unless measures are imposed to reduce them. 

But even as the United States and some other countries continue to burn more
fossil fuels and to emit more carbon dioxide, the main greenhouse gas, Russia
and its neighbors are burning and emitting less than previously forecast, the
agency said Wednesday. 

Under the treaty, countries that give off more greenhouse gases than the
treaty allows may buy surplus reductions from countries that give off less
than their targets. 

The energy agency said the continuing depression in Russia and other former
Soviet states was holding down energy use and would probably produce a huge
bubble of emissions credits by the time the treaty is supposed to come into
force, between 2008 and 2012. The expected emissions of carbon dioxide in
Eastern Europe and the former Soviet Union in the year 2010 are likely to be
13 percent lower than predicted last year, the new forecast said. 

These countries will have at least 374 million metric tons worth of carbon
credits available to sell to other countries, it said. 

Last year, the agency forecast that these countries would have only 196
million metric tons of carbon credits. (Under the treaty, emissions of all
greenhouse gases are tallied in units of carbon, one of the elements released
when fossil fuels are burned.) 

For countries like the United States whose emissions are growing far beyond
the limits set by the treaty, the change is significant. 

To meet the targets of the Kyoto Protocol, industrialized countries would
need to eliminate about 822 million metric tons of carbon from their
anticipated emissions. 

"If the industrialized nations that have agreed to carbon emissions caps can
purchase these credits, this level of trading alone would allow their carbon
emission levels to rise by an average of 7 percent over 1990 levels, and still
meet the Protocol's average emissions target of 7 percent below 1990 levels,"
the energy agency said. 

Worldwide, the agency said, carbon emissions are expected to be 39 percent
greater in 2010 than they were in 1990. While that is 4 percent less than the
agency predicted last year, it suggests that the world as a whole is doing far
less than needed to head off the risks of global warming. 


AmCham Newsletter 
American Chamber of Commerce in Russia
March - April 1999
Crisis as Opportunity
Talk by Irina Khakamada

Although Russia’s crisis has taken a painful toll, ultimately it could
prove the catalyst for necessary changes in the Russian economy, political
leader Irina Khakamada told Chamber members during a recent AmCham luncheon. 

"Russia after the crisis has seen the market practically cleaned up, which
is very good for the competitiveness of the Russian market," said
Khakamada, leader of the Russian socio-political union Common Cause. "For
example, the medium-sized banks whose corporate clients were market
companies, and who did not engage in stock market speculation, moved from
the top 300 into the top 10." 

While the crisis damaged importers, Khakamada said it has helped domestic
industry by spurring development of domestic brands. "In general, trade in
foodstuffs in Russia will be a key growth point in the near future," said
the speaker, former chair of the Russian Federation State Committee for
Support and Development of Small Business. "The next growth point is the
development of software, because we have a highly intellectual work force." 

However, until growth begins again in Russia – which is at least two years
away, Khakamada said – many Russians face unemployment. Small- and
medium-sized businesses have laid off 1 million non-permanent staff and 14
percent of their full-time employees since August, Khakamada noted during
her Februrary 9 speech. "So it is important for Russia to promote those
economic growth points that lead to higher labor productivity and better
quality, but at the same time create a large number of jobs. So
strategically it is important for us to promote trade, whereas such things
as the internet, although fashionable, do not create many jobs." 

One thing Russia must do to stoke its economy is to lure into the market
the estimated $35-40 billion hidden under mattresses, the speaker said.
Khakamada, an economist by training and one of the organizing members of
the Economic Freedom Party, said that since Russians have little faith in
the state or in Russian commercial banks, "I back the suggestion made by
(Central Bank Chairman Viktor) Gerashchenko and (Prime Minister Yevgeny)
Primakov that foreign banks with full licenses should be allowed into
Russia. And the other method is to create a system in which citizens can
entrust money to each other. The so-called mutual credit and mutual
insurance society, or primitive market mutual assistance societies. I have
been trying to push this law through for five years, but it is stuck in the
President’s administration. Under the law, the Central Bank would allow
the function of crediting to be performed by credit associations without a
commercial bank license and without taxes on internal transactions." 

The prime hindrance to investment in Russia is not what politicians do,
however, but administrative barriers, the former Duma deputy said. "On
average, it takes three months to register an enterprise and it costs about
$500," she said. "Registration in Russia takes four times longer than in
Poland, which is comparable in terms of per capita GDP. Then comes the
problem of licensing. We have taken a good step here; for the first time
the federal law on licensing has been adopted. Now, the equivalent of not
more than 10 minimum wages can be charged for the issue of a license." 

Another problem is a "lack of transparency in the requirements of fiscal
bodies." Inspectors from the fire safety office, the sanitary and health
department, the tax office and other oversight agencies come four times
more often than in Poland, Khakamada said. Because of the labyrinth of
regulations and paperwork, "50 percent of small enterprises don't get
registered at all," Khakamada said. "Seventy percent of turnover is
understated in formal documents. The real wage fund is understated by 90
percent – because the tax pressure on the wage bill is 42 percent." The
result is that, according to some estimates, losses to the budget amount to
twice the sum actually collected, she said. 

Khakamada, who has been called a "politician of the 21st century by Time
magazine," said that Russia’s economy could be invigorated by: 

* removing bureaucratic barriers "to diminish corruption and make the
system more transparent"; and 
* simplifying the tax system and reducing taxes "For the sake of national
interests, the bureaucracy should limit its own activities and learn to
collect taxes from a broad taxable base and not from high tax rates." 

She later acknowledged, however, that it may take another crisis and a
hungry bureacracy before fundamental change can occur. 

"Thirty percent of the operating enterprises believe that this will never
happen," Khakamada said. "But still they say they will never leave Russia,
because they have learned to work outside the law. So, there can only be
one conclusion. In order to develop our own markets, which have a huge
intellectual and industrial potential, Russia doesn’t need western
assistance or western advisory services or technical assistance. Russia
itself should solve its own problems." 


Primakov: 'We Will Put a Stop' to Illegal Capital Outflow 

Rossiyskaya Gazeta
30 March 1999
[translation for personal use only]
Unattributed report: "Reliable Barrier Needed" 

An extraordinary Russian Government session 
yesterday approved draft amendments to existing Russian legislation on 
foreign-exchange regulation and exchange controls, on banks and banking, 
and to the Criminal Code, aimed at preventing the illegal export of 
capital from Russia. 

"It is time to put a stop and we will put a stop to" the illegal export 
of capital from Russia, Russian Federation Prime Minister Yevgeniy 
Primakov stated yesterday, opening a regular government session. 

"This matter brooks no delay. Contrary to the law huge amounts of foreign 
currency leave the country every year -- $20-25 billion a year," Yevgeniy 
Primakov said. In order to prevent this, he continued, the government 
together with the State Duma is drawing up a plan of measures and 
amendments to legislation "which will make it possible to provide more 
reliable protection against illegal outflows of foreign exchange abroad." 



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